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‘Debt and equity-release boom could spark an economic storm’

High levels of personal debt and pension shortfalls could fuel a stormy economic climate, says BBC business editor Jeff Randall.

In a stark warning, Randall said consumers had discovered equity release as a form of easy cash, using the increase in the value of properties to borrow and spend rather than invest.

Consumers are eroding their equity which could be put towards pensions and funding retirement.

In an address on Security in a Risky World, Randall said consumers are under an illusion of wealth and economic recovery. With an increase in life expectancy, the pressure on pension funds is greater than ever, said Randall. He added that it is not unusual for share prices to stay in the doldrums for over 10 years and predicted that the FTSE will not get back to its peak of 6,900 reached before the dotcom crash for another five years.

Randall said: “If I am right, all involved in the pensions, savings and life insurance industry face a long, difficult road ahead.”

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I read Money Marketing’s Leader last week and glimpsed Mr Cheung’s piece (will read fully later).

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Is it possible to make a positive return,

regardless of market conditions? This seems a tricky proposition, particularly when you are investing in the bond market which has a big question mark hanging over it at the moment.

Parental leave and pensions

Fiona Hanrahan  – Senior Product Insight and Technical Support Analyst We are often asked how parental leave impacts workplace pension schemes in terms of funding in general, auto enrolment and salary exchange. This article will explain each of these. How does parental leave impact the funding of workplace pension schemes? A member of a defined […]

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